Mercieca v SPI Electricity Pty Ltd
[2011] VSC 438
•12 September 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2010 01978
BETWEEN:
| PAUL ANTHONY MERCIECA and AMELIA JANE COOMBES | Plaintiffs |
| v | |
| SPI ELECTRICITY PTY LTD (ACN 064 651 118) and Ors | Defendants |
| S CI 2010 01497 | |
| AND BETWEEN | |
| LENA BIRTI AND JOSEPH BIRTI | Plaintiffs |
| v | |
| SPI ELECTRICITY PTY LTD (ACN 064 651 118) and Ors | Defendants |
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JUDGE: | ZAMMIT AsJ | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 29 August 2011 | |
DATE OF JUDGMENT: | 12 September 2011 | |
CASE MAY BE CITED AS: | Mercieca and Anor v SPI Electricity Pty Ltd and Ors | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 438 | |
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PRACTICE AND PROCEDURE - Amendment of pleadings – Whether amendments necessary to determine the real question in controversy between the parties under r 36.01 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) – Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 considered – Namberry Craft Pty Ltd v Watson [2011] VSC 136 considered.
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APPEARANCES: | Counsel | Solicitors |
| S CI 2010 01978 | ||
| For the Plaintiffs | Mr T Tobin SC Ms K Bowshell | Maddens Lawyers |
| For the First Defendant | Mr J Beach QC Mr D Farrands | Freehills |
| For the Second Defendant | Mr C Winneke | McCabe Terrill |
| For the Third to Fourth Defendants | Mr C Caleo SC | Norton Rose |
| S CI 2010 01497 | ||
| For the Plaintiffs | Moyle Legal | |
| For the Defendants | (As above) | (As above) |
HER HONOUR:
There were two summonses dated 19 August 2011 filed by the third and fourth defendants, the Secretary to the Department of Sustainability and Environment (“DSE”) and Parks Victoria (“the State Parties”), before the Court in proceedings no. 1978 of 2010 (“the group proceeding”) and no. 1497 of 2010 (“the Birti proceeding”). The State Parties seek leave to amend their defences to the respective plaintiffs’ claims and their defences to the counterclaim filed by the first defendant, SPI Electricity Pty Ltd (“SPI”).
The evidence before the Court included: (a) two affidavits of Nicole Joy Wearne sworn 19 August 2011 on behalf of the State Parties; (b) two affidavits of Kenneth Alexander Adams, sworn 26 August 2011 on behalf of SPI.
Submissions were made primarily in the group proceeding but are applicable to the Birti proceeding. For convenience in these reasons I will refer to the pleadings and submissions in the group proceeding. The submissions and my reasons apply to both proceedings.
The substance of the proposed amendment to the State Parties’ defence appears at paragraph 23 of the proposed amended defence. The amendments in paragraphs 73 and 101 are merely consequential. The main amendment responds to paragraph 42 of the amended statement of claim, the principal paragraph in the plaintiffs’ claim addressing the cause of the Beechworth fire:
42.Shortly before 6.00pm on 7 February 2009:
(a)the southern section of the Tree failed and fell onto the east side conductor on the power line;
(b)the conductor detached from the Pole 170 cross arm;
(c)the conductor as it fell remained energised or re‑energised by reason of the operation of the ACR (automatic circuit recloser device);
(d)the conductor, as it fell, arced with the pole, alternatively vegetable matter near the base of the pole, alternatively the Tree;
(e)the arcing caused a discharge of sparks or heat;
(f)the sparks or heat ignited dry vegetable material on the ground near the base of the pole, alternatively the Tree; and
(g)the sparks or heat thereby started a fire which subsequently spread over a wide geographic area, being the Beechworth fire.
Particulars
The load imposed by the trunk and limbs became too great for the root system. The main trunk root dislodged from the surrounding soil and levered out of the ground as the trunk fell to the east‑south‑east. Further particulars may be provided following the delivery of experts’ reports.
The State Parties’ proposed amendment to paragraph 23 is:
23.As to paragraph 42 -
(a)they say that the Tree did not cause the Beechworth fire;
(b)they say that the electric assets owned and operated by SPAusNet caused the Beechworth fire in that:
(i)the fire was caused by molten particles emitted from arcing at the top of Pole 170 coming into contact with dry vegetable material on the ground in the vicinity of Pole 170;
(ii)alternatively, the fire was caused by the failure of the east side insulator attached to the cross arm of Pole 170 which caused the east side conductor (the conductor) to become detached from the Pole 170 cross arm which in turn gave rise to the events alleged in paragraphs 42(b) to (g) inclusive of the Statement of Claim;
(iii)alternatively, the fire was caused by the failure of the east side insulator attached to the cross arm of Pole 169 which caused the conductor to become detached from Pole 169 which in turn caused the east side insulator attached to the cross arm of Pole 170 to fail and the conductor to become detached from the Pole 170 cross arm which in turn gave rise to the events alleged in paragraphs 42(b) to (g) inclusive of the Statement of Claim;
(c)in the alternative to the matters alleged in sub‑paragraphs (a) and (b) hereof, they say that if the southern section of the Tree failed as alleged in paragraph 42(a) of the Statement of Claim, the electrical assets owned and operated by SP AustNet contributed to the ignition of the Beechworth fire in that the conductor on becoming detached from the cross arm of Pole 170 remained energised by reason of the operation of the ACR as alleged in paragraph 19(c) of the Statement of Claim which in turn gave rise to the matters alleged in paragraphs 42(d) to (g) inclusive of the Statement of Claim.
Particulars
Particulars will be provided upon the delivery of experts reports.
(d)they otherwise deny the allegations made therein.
For completeness paragraph 23 of the State Parties’ current amended defence to paragraph 42 of the amended statement of claim pleads:
23.As to paragraph 42 –
(a)they deny that the Tree fell on the powerline; and
(b)they otherwise do not admit the allegations made therein.
The Claims
The plaintiffs, Paul Mercieca and Amelia Coombes, are the named representatives in the group proceeding under Part IVA of the Supreme Court Act 1986 (Vic). The Birtis conducted a vineyard, winery and café business on their property at 123 Morgans Creek Road, Kancoona South.
In both proceedings the plaintiffs’ claims arise from the fire which started on the eastern edge of the Buckland Gap Road, three kilometres south of Beechworth on 7 February 2009 (“the Beechworth fire”).
At the heart of the plaintiff’s claim is the allegation in paragraph 42(a) that the Tree fell onto the conductor on the powerline causing the conductor to become dislodged from its supporting pole (Pole 170) and to fall. This caused a current fault with arcing between the conductor and supporting pole. A consequence of the arcing was that a fire ignited in the grass near the pole and that the fire subsequently travelled and caused the alleged damage in both claims.
SPI admits that the Tree fell onto the east-side conductor and caused it to detach from Pole 170, but does not admit the subsequent events. SPI pleads that contact of the Tree with the powerline led to the ignition of the fire “through some mechanism which is unknown”.[1]
[1]Paragraph 42(g) SPI’s Amended Defence and Counterclaim dated 28 February 2011.
Status of proceeding
Both proceedings are set down for trial on 20 February 2012.
On 20 June 2011, his Honour Dixon J made Trial Orders in both proceedings including orders for the exchange of the evidence of expert and lay witnesses.
The Trial Orders do not canvass discovery. The evidence demonstrates that as between SPI and the State Parties, there has been agreement as to discovery on the existing pleadings. The issue of what further discovery may be required as a result of the proposed amendments has not been resolved.[2]
[2]Affidavit of Nicole Joy Wearne sworn 19 August 2011 in proceeding no. 1978 of 2010, Exhibit NJW-9
In relation to the expert evidence, the orders require the parties to file and serve their expert reports by 17 October 2011. A number of steps were required to by the time this application was heard including:
1) identifying the name and qualification of each expert they propose to call at trial;
2) a statement of the source material with which the expert is to be briefed;
3) a statement of any assumptions which the expert is being asked to make;
4) a list of questions which the expert is being asked to answer;
5) and each party was to advise the other party of any objection relating to the expert witnesses.
The State Parties’ evidence
Ms Wearne’s evidence
Ms Wearne is a partner of the law firm Norton Rose, the State Parties’ solicitors.
Ms Wearne was not called for cross‑examination. Her evidence by way of affidavit was not contested.
Ms Wearne’s evidence is:
1) at the time of its initial defence, the State Parties were not in a position to advance the alternative causes which they now seek leave to advance. Further investigations were required before such alternative causes could be advanced;
2) since filing their defence on 13 April 2011, the State Parties have undertaken further investigations into the cause of the fire. These further investigations involved interviewing numerous lay witnesses and obtaining experts to provide opinions across a range of disciplines including: electrical engineering and structural engineering;
3) the further investigations were directed to the validity of the theory that the Tree fell on the power line prior to ignition of the fire, and the alternative theory that the fire ignited while the Tree, and in particular the southern section, was still standing, metres away from the power line;
4) the further investigations included having electrical assets, including the insulator, examined. The electrical assets were in the custody of Victoria Police (on behalf of the Coroner).
5) on 17 June 2011 a request was made to the Coroner that the State Parties be allowed to inspect the electrical assets in the custody of Victoria Police;[3]
6) based on the inspection of the electrical assets the State Parties provided further instructions to experts as to the probable cause of the fire;
7) as a result of the further investigations, the State Parties are now in a position to advance the case they seek to allege;
8) on 8 August 2011 Ms Wearne received instructions from the State Parties which led to the proposed amendments of their defence;
9) Ms Wearne deposes that: “I am satisfied, upon the basis of the further investigations, that there exists a proper basis to make these allegations as to the alternative cause of the Beechworth fire”;[4]
10) on 8 August 2011 Norton Rose wrote to each of the solicitors for the other parties setting out the proposed substantive amendment to the State Parties’ defence and requested a written response;
11) Ms Wearne considers that allowing the State Parties to amend their defences will not result in the postponement of the trial date or prevent mediation from proceeding in November 2011;
12) the State Parties have provided to the other parties, in accordance with the orders of his Honour Dixon J, the names and addresses of expert witnesses to be retained on behalf of the State Parties, including the name and details of Dr Sweeting, an electrical engineer and the questions and assumptions provided to Dr Sweeting.
[3]Affidavit of Nicole Joy Wearne sworn 19 August 2011 in proceeding no. 1978 of 2010 at [11] and NJW‑1.
[4]Affidavit of Nicole Joy Wearne sworn 19 August 2011 in proceeding No. 1978 of 2010 at [16].
Mr Caleo, on behalf of the State Parties, informed the Court that the questions, assumptions and evidence that the State Parties provided to Dr Sweeting include matters arising from the proposed amendments, that is the alternative causes to the Beechworth fire. There has been no objection by the parties to the material served by the State Parties under cover of the letter dated 8 August 2011, including the materials concerning Dr Sweeting.
The plaintiffs have nominated two experts in the field of electrical engineering, Professor Trevor Blackburn and Professor Alex Baitch. Ms Wearne considers that given the plaintiffs’ allegations regarding inadequate engineering precautions in the design and operation of the power line and the ignition resulting from arcing, SPI is likely to have already retained experts in the field of electrical engineering. Further, in their commercial assessment of prospects and preparation for any mediation, the parties would have considered the denial by the State Parties that the Tree caused the Beechworth fire and the allegations by the plaintiffs regarding inadequate engineering precautions in the design and operation of the power line. Ms Wearne considers that the alternative theory of the cause of the fire is not such a different matter from what the parties would have necessarily considered in any event. Accordingly, the sequence of events leading to the cause of the fire has been in issue from the outset.
Legal Principles
The State Parties bear the onus of persuading the Court to exercise the discretion in its favour. In the case of the discretion to grant an amendment, the applicant must satisfy the Court that the amendment is necessary for the just resolution of the proceeding having regard to the objectives of the Rules and the Civil Procedure Act 2010 (Vic) (“CPA”),[5] including that the proceeding be promptly and economically determined.
[5]Rule 36.01(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic); and s 7 Civil Procedure Act 2010 (Vic).
The High Court examined the principles relevant to an amendment to a civil claim in Aon Risk Services Australia Limited v ANU.[6]
[6](2009) 239 CLR 175.
Rule 36.01(1) and (3) provides:
General
(1)For the purpose of –
(a)determining the real question in controversy between the parties to any proceeding; or
(b)correcting any defect or error in any proceeding; or
(c)avoiding multiplicity of proceedings –
the Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.
(3)An endorsement of claim or pleading may be amended under paragraph (1) notwithstanding that the effect is to add or substitute a cause of action arising after the commencement of the proceeding.
In Namberry Craft Pty Ltd v Watson,[7] his Honour Vickery J provided a summary of the factors a court should consider when exercising the discretion to allow an amendment. His Honour said at paragraphs 38 and 39 referring to AON’s case:[8]
[7][2011] VSC 136.
[8](footnotes omitted).
Nevertheless, there are to be limits placed upon re-pleading. The High Court in Aon referred to a range of considerations which need to be weighed in the balance in the exercise of the discretion to grant an amendment to a pleading. The High Court made reference to the following factors:
(a)whether there will be substantial delay caused by the amendment;
(b)the extent of wasted costs that will be incurred;
(c)whether there is an irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for, whatever costs may be awarded;
(d)concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;
(e)whether the grant of the amendment will lessen public confidence in the judicial system;
(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.
39.The list of factors referred to in Aon is not exhaustive. In the end, all matters arising in any particular case relevant to the exercise of the power to permit an amendment must be weighed.
SPI’s Submissions
SPI submits that the proposed amendments should not be allowed on the basis that:
1) the amendments are defective in form;
2) at this late stage there is no proper basis demonstrated for the amendments in the Wearne affidavit;
3) the sequence of events that have occurred in the procedural hearings in this matter suggest that the proposed amendment is sought to enliven the State Parties’ chance of obtaining further discovery from SPI;
4) allowing the amendment at this stage will have consequences, including the possible vacation of the trial date which would prejudice all parties, particularly the plaintiffs and the group members;
5) the proposed amendment is to plead a new case and the State Parties should have pleaded it sooner. The State Parties’ suggestion that the amendments are already embraced within the State Parties’ current case is incorrect.
SPI submits the real question in controversy between the parties is whether the Tree fell on the conductor and was therefore a necessary, although not a sufficient, set of conditions for the fire that subsequently occurred. The proposed amendment goes beyond putting into issue whether the Tree fell onto the conductor and goes into alternative causes which embark into the different areas of mechanical and electrical engineering of the distribution line.
SPI raised three deficiencies in the proposed amendments. The State Parties concede the deficiencies exist and agree that they should be corrected and will do so if leave to amend is granted. Mr Caleo, on behalf of the State Parties, identified how the deficiencies could be cured.[9] This was not disputed by SPI.
[9]Transcript at pages 77-78.
I will not repeat these arguments given that the State Parties have agreed to amend the offending paragraphs if the proposed amendments are allowed.
SPI submits that the Wearne affidavit does not provide a proper basis for:
1) the assertion that the Tree fell after the fire;
2) what caused the arcing said to give rise to molten particles being emitted;
3) what caused the failure of the e-site insulator on Pole 170 or alternatively on Pole 169;
4) any basis for a conclusion that the State Parties already received expert opinions which might support the pleading amendments.
SPI submits that the State Parties’ application to amend is too late. The State Parties’ amended defence was filed with the Court on 2 May 2011. On 30 May 2011, the State Parties informed the Court at the case management conference that the denial defence was adequate to require discovery by SPI of documents relating to causes of the fire other than the Tree.
SPI submits that if the proposed amendments are allowed, the exchange of expert reports could not occur by 17 October 2011, therefore the mediation would not occur in November 2011 and the trial date of 20 February 2012 will be in jeopardy.
SPI has not retained experts who are able to address the alternative causes in the proposed amendments and SPI has not identified the fields of expertise which are required.[10] SPI asserts that these steps will take time. There is no positive evidence before the Court of how long such steps will take or whether the steps can be completed by SPI in accordance with the Trial Orders made by his Honour Dixon J on 20 June 2011.
[10]Affidavit of Kenneth Adams sworn 20 August 2011 at [19]-[22].
SPI submits that the difficulties with complying with the current Trial Orders would be significantly affected by additional discovery obligations and that the State Parties have failed to address the discovery issue (if any) arising from the amendments if made.[11]
[11]Affidavit of Kenneth Adams sworn 26 August 2011 at [15]-[16].
Plaintiffs’ Submission
The plaintiffs submit that the State Parties’ proposed amendment to their pleadings to allege alternative causes of the fire has never been advanced by the State Parties in this proceeding or elsewhere, despite opportunities to do so.
The plaintiffs submit that if the Court grants leave to the State Parties to amend the defence it will have a number of consequences, that cannot be cured by way of a costs order.
The plaintiffs submit that the proposed amendments raise issues which would require the parties’ experts to examine the top of Pole 170 to look for pitting, charring or other evidence that arcing took place at that location. The plaintiffs submit that any evidence which may have existed at the top of Pole 170 has now been exposed to two and a half years of weather and it will be almost impossible to determine whether such evidence was in existence as a result of events on 7 February 2009.
The plaintiffs submit that they are no longer able to gather evidence to support or impeach the allegation now sought to be made by the State Parties and that the plaintiffs would suffer prejudice which could not be remedied by costs.
The plaintiffs submit that granting leave to the State Parties to amend will result in:
1) the parties having to retain further expert witnesses;
2) there may be a need for consequential amendments to the pleadings;
3) further discovery by all parties;
4) possible interrogation of the alternative causes to the fire;
5) delays in obtaining material prior to an expert enclave leading to consequential delay in the hearing of the trial; and
6) likely increased costs.
The plaintiffs submit that they are not as resourced as the State Parties and to permit the amendments would constitute injustice.
Mr Tobin on behalf of the State Parties, emphasised that the State Parties were represented before the Victorian Bushfire Royal Commission (“VBRC”) for the duration of its hearing. Mr Tobin submits that the State Parties had two and a half years to consider the matters sought to be raised by the proposed amendments and that it was incumbent upon the State Parties to put before the VBRC any alternative theory as to how the fire started. The plaintiffs submit that unless the State Parties can now provide an explanation as to why it did not advance the alternative theories they should not be permitted to do so. The plaintiffs relied on Aon Risk Services Australia Limited v ANU[12] where the Court noted:
Critically the matters relevant to a just resolution of ANU’s claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under Rule 5.02(1) was to be exercised in its favour and the disadvantage of Aon. None was provided.
[12](2009) 239 CLR 175 at [114].
The plaintiffs also rely on s 25 of the CPA which requires parties to use reasonable endeavours to minimise delays.
Finally, the plaintiffs submit that if the amendments are allowed it should be done on the basis that the State Parties provide to the Court and the other parties:
(a)any expert report that is relied upon to advance the alternative causation theory;
(b)copies of any expert analysis of material that has been undertaken;
(c)any lay evidence that is relied upon to advance the theory.
Mr Taylor on behalf of the plaintiffs in the Birti proceeding adopted the plaintiffs’ submissions in the group proceeding. In addition, Mr Taylor submits that having regard to the first plaintiff who has a serious psychological injury, any delay caused by the amendments will almost certainly aggravate that condition.
While it is clear that any delay is undesirable in the proceeding for all parties, there was no evidence before the Court regarding the first plaintiff’s psychological injury and/or any possible aggravation to that condition by delay in the hearing of the proceeding.
The State Parties’ Submissions
The State Parties submit that on the existing pleadings, the claims made against them by the plaintiffs and SPI will fail if the Court finds that the Tree did not fall on the power line and trigger the chain of events that allegedly led to the ignition of the fire. The State Parties submit that the proposed amendments to the proceedings do not advance a new claim or raise a new defence. The amendments serve the purpose of ensuring that the other parties are not taken by surprise in relation to an existing defence.
The State Parties submit that the allegations in paragraph 42 of the plaintiffs’ amended statement of claim can give rise to a number of factual issues upon which lay and expert evidence will be given. In particular, sub-paragraphs (c) through to (g) allege theories of steps which the plaintiffs say ensued and then ignited the fire.
The State Parties submit that the allegation that the origin event leading to the fire was that the Tree failed and fell onto the east side conductor on the power line has been put in issue since the commencement of the plaintiffs’ claim and SPI’s counterclaim against the State Parties.
The State Parties refer to a case management conference with his Honour Dixon J held on 30 May 2011 at which they say the causation issue was discussed. The issue that the State Parties’ current pleadings amounted to a bare denial was raised at the case management conference.
The transcript of the case management conference reveals at page 42 line 13 a submission made on behalf of SPI in which counsel for SPI said:
You [the State Parties] can’t hide under a denial and then assert an alternative position. You’ve got to say what your alternative position is.
His Honour noted that the State Parties may or may not state what their alternative position is. His Honour said:[13]
I would like the parties to consider that at some stage – because on that particular issue it would identify what are the issues of fact that go to determining how the fire was caused … It plainly is a central issue in the proceeding.
[13]Page 43, transcript lines 17 to 22
The State Parties submit that the evidence they will be required to lead in relation to the proposed amendments would all be admissible on the existing pleadings. However, the State Parties submit that if they waited until they filed their outlines of lay evidence and their expert reports they would be criticised for doing so without having put the parties on notice and amended the pleadings accordingly. The State Parties submit that leave to amend is required because r13.07(1)(b) specifically requires them to do so and if they do not they could be found to have taken the parties by surprise. Critically, the State Parties submit that they are not alleging a new cause of action against any party.
The State Parties note that their amended defence was filed in May 2011. The application is made now rather than in May because there was no earlier point in time when the State Parties had a sufficient basis to make these allegations.
Ms Wearne’s affidavit sworn 19 August 2011 sets out the steps taken by the State Parties including investigations with experts that have occurred since the time of filing the initial defence to the plaintiffs’ statement of claim.[14]
[14]Affidavit of Nicole Wearne sworn 19 August 2011 [8]-[16].
The State Parties submit that the clear inference from Ms Wearne’s affidavit bearing in mind paragraph 16 of her affidavit, is that prior to making this application, she considered that there were no materials that constituted a proper basis to make these allegations and, consistently with her ethical obligations, no application was made to plead these matters when there was not a proper basis.
In response to the plaintiffs’ submissions the State Parties submit that from the outset they have alleged that the fire was not started in the manner alleged in the plaintiffs’ statement of claim because that allegation takes as the opening event, the falling of the Tree.
In relation to the plaintiffs’ submission that there is a loss or degradation of critical evidence, Dr Sweeting has not looked at the tops of the poles and the State Parties’ expert’s view is that such an inspection while potentially of assistance is not critical to his opinion. The only assets inspected by the State Parties’ expert are the electrical assets that are in the possession of Victoria Police (under the jurisdiction of the Coroner), which the other parties can access.
The State Parties note that their expert reports have been obtained in the course of the last three months. By 8 August 2011 the parties were squarely on notice about the State Parties’ proposed amendments and the name of an expert in electrical engineering, Dr Sweeting, and the questions and assumptions provided to Dr Sweeting relevant to the proposed amendments.
The questions and assumptions forwarded to Dr Sweeting included:
In your opinion, did the electrical assets on or in the vicinity of Poles 169 and/or 170 on Buckland Gap Road, approximately four kilometres south of Beechworth, cause or contribute to the cause of the fire which ignited at or near the base of Pole 170 on 7 February 2009?
The State Parties note that in complying with his Honour Dixon J’s Trial Orders the plaintiffs have served draft letters of instruction to two experts, Professor A. Bache and Professor Blackburn, electrical engineers. Professors Bache and Blackburn are asked questions based on an assumption that the Tree fell onto the east side conductor. The State Parties submit that it was open to the plaintiffs, based on the State Parties’ existing pleadings and even more so having notice of the proposed amendment and knowledge of Dr Sweeting’s involvement, to raise with their experts issues based on any assumption of alternative causes to the fire from at least 8 August 2011 if not sooner given the existing pleadings.
The State Parties submit that any argument by the plaintiffs about delay is without merit given they have retained two electrical engineers.
Further, no party has exchanged expert reports to date given his Honour Dixon J’s Trial Orders. The parties are not required to do so until 17 October 2011.
The State Parties submit that what happened before the Royal Commission is “beside the point”. The plaintiffs did not make allegations of fact and did not seek a finding of liability against the State Parties until January this year.
The State Parties submit that Ms Wearne is an officer of the Court and has deposed to the timing at which the State Parties became aware of material capable of supporting the allegation and therefore the formation of a proper basis for making those allegations. Ms Wearne’s evidence is not challenged by the plaintiffs or SPI.
In relation to SPI’s objections to the amendments, the State Parties repeat the submissions in relation to this not being a new cause of action.
In response to the plaintiffs’ submission that any leave to amend should only be given with certain conditions, the State Parties emphasise that there is no expert report to exchange, because his Honour’s directions provide that no party is to instruct an expert to prepare a report until the steps he has directed are undertaken. Mr Caleo said that there was not a report able to be tendered for trial. Mr Caleo noted that the State Parties have retained experts with whom they have met and conferred as indicated by Ms Wearne and they have had experts inspect materials, in this case the materials in the possession of Victoria Police, to provide to their instructing solicitors the opinion they are able to give.
In relation to SPI’s submission that it has not retained experts who are able to address the alternative causation case, the State Parties note that SPI has retained an electrical engineer.
The State Parties submit that SPI has known that the State Parties deny that the Tree was the cause of the fire from the initial defence to the plaintiff’s amended statement of claim and from their defence to SPI’s counterclaim dated 28 February 2011. SPI’s decision not to have an expert investigate this issue is a matter for SPI. However, given the proposed amended pleadings, the State Parties submit that there is little obstacle to SPI taking those steps in relation to their experts now, particularly in circumstances where they are told a list of questions and assumptions for the State Parties’ expert.
Accordingly, the State Parties submit that any delay occasioned by the proposed amendments is minimal.
Finally, in relation to SPI’s contention that the proposed amendments are to serve an ulterior motive, that is discovery from SPI, the State Parties submit that this is a furphy.
The State Parties submit that ultimately the discovery process is one which the Court will have control over and in particular control over the scope and timing of discovery. Further, the State Parties submit that discovery hinging on the proposed amendments was required on the current pleadings.
Eagle Travel Services Pty Ltd’s Submissions
The second defendant, Eagle Travel Tower Services Pty Ltd, (“Eagle Travel”) indicated that it did not oppose the application.
Mr Winneke, on behalf of Eagle Travel, submits that the amendments sought by the State Parties are appropriate given that what is proposed will in effect enlighten the other parties as to the way in which the State Parties put their defence. Mr Winneke accepts there might be some consequences alluded to by SPI if the amendments are made, however the consequences of not permitting the amendments are significant.
Mr Winneke anticipates that Eagle Travel in all likelihood will need to amend their defence, if the State Parties’ amendments are allowed.
Decision
In both proceedings, the cause of fire has been in issue from the outset. In the group proceeding the allegation that the southern section of the Tree failed and fell onto the east side conductor on the powerlines causing the conductor to detach from Pole 170 was denied by the State Parties in their original defence in April 2011 and is reflected in the State Parties’ current pleading.
I accept that on the existing pleadings the claims against the State Parties in both proceedings will fail if the Court concludes that the Tree did not fall on the power lines and trigger the chain of events which allegedly led to the ignition of the fire. I accept the State Parties’ submission that even in the absence of the proposed amendment, admissible evidence at trial would include evidence that no other cause of the fire was possible and/or evidence of other causes were possible.
The discourse between the parties at the case management conference held on 30 May 2011 supports this fact. If the State Parties endeavour to lead such evidence of alternative causes to the fire, the plaintiffs and SPI would be critical of the State Parties for failing to amend their pleadings accordingly. Pleading the alternative causes to the fire is not only appropriate but required given the terms of r13.07(1)(b). It does not take a great deal of imagination to envisage the situation at trial if the proposed amendments were not made. The plaintiffs or SPI would be entitled to make an application for an adjournment or an application that such evidence may not be admissible given the failure by the State Parties to plead the alternative causes of the fire.
The proposed amendments are necessary to determine the question in controversy between the parties, that is: whether the Tree or some other factor caused the Beechworth fire. Ideally, the State Parties would have pleaded these issues in the defence filed in May 2011. However, I am satisfied based on the evidence before the Court that up until the time of making this application the State Parties did not have a proper basis to make the application. Ms Wearne’s affidavit is not challenged. Ms Wearne is an officer of the Court with considerable litigation experience.
The plaintiffs in the group proceeding were scathing of the State Parties for their failure to raise the alternative causes in the course of the VBRC.
The simple point is that from the beginning of the litigation in this Court, the State Parties have denied that the Tree fell onto the power line. The issue of causation has been alive from the beginning of these proceedings. Whether the State Parties should have raised these issues in the course of the VBRC bears no relevance to the current litigation. The Rules of the Court and the CPA govern this proceeding. I am not satisfied on the evidence before the Court that the State Parties have breached their obligations under the CPA or failed to comply with the Rules of the Court.
I accept that in all likelihood the other parties may want to amend their pleadings and that they will need to obtain or explore with existing experts the matters raised in the proposed amendments.
I am not satisfied on the basis of the evidence before the Court that SPI or the plaintiffs will not be able to comply with the orders in relation to expert evidence made by his Honour Dixon J on 20 June 2011. The only evidence put before the Court by SPI is that it has not retained a suitable expert to address the issue. There is no evidence that enquiries have been made or that suitable experts cannot be found and cannot meet the current timetable. There is no evidence before the Court in relation to the plaintiffs’ situation in relation to experts. The plaintiffs have retained electrical engineers.
The State Parties have obtained their expert evidence in a three month period which included gaining access to the assets in possession of Victoria Police.
It may be that the other parties require some additional time. However, there is no evidence before the Court as to how much time is required and whether it will mean an adjournment of the trial date in February 2012.
In relation to the plaintiffs’ submission of the loss and degradation of critical evidence, the State Parties’ expert has not relied upon the pole, only the assets in the possession of Victoria Police. Further, even if the State Parties had pleaded in April 2011 the amendments it now seeks to plead, the poles would have been subjected to almost two years of weather and would have been altered since the fire on 7 February 2009.
A real issue for SPI is discovery and the possible implications that the amendments may have for SPI’s discovery. It is simplistic to suggest that further discovery can be completed within a short time frame. The Court may need to hear evidence as to what SPI is required to undertake in order to comply with discovery obligations arising from the amended pleading. However, any additional discovery or delay is within the control firstly of the parties and secondly the Court. The issue of whether documents capable of supporting or negating a finding that the Tree caused the fire were debated before his Honour Dixon J at the case management conference. What steps should be taken to make such discovery will be negotiated between the parties and determined finally by the Court.
I am satisfied that Ms Wearne’s evidence establishes that at the time of pleading their initial defence the State Parties were not in a position to plead alternative causes of the fire and that since that date investigations, including obtaining access to electrical assets in the physical custody of Victoria Police and retaining expert witnesses, provided a proper basis to make the proposed amendments. The State Parties will address the deficiencies in the current form of the proposed pleadings. While it would have been desirable for the timing of the State Parties’ application to have been brought sooner, it has not been brought so close to the trial date that the Court cannot preserve the 20 February 2012 trial date.
I do not consider it appropriate that leave to amend the pleadings be made conditional upon the State Parties providing their expert reports and/or any evidence from experts to the other parties. Given his Honour’s Trial Orders no party has been required to exchange expert material. To do so would be placing an unfair and undue burden on the State Parties.
I consider leave should be granted to the State Parties in each proceeding to amend the defence to the respective plaintiffs’ claim and the defence to the counterclaim filed by SPI. The proposed amendment needs to be further amended to cure the deficiencies identified in the course of the hearing of this application.
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